Pennon ahead of forecasts

2nd Jun 2009 07:07

South-West water utility Pennon posted profits ahead of market forecasts last year boosted by a good peformancae from waste arm Viridor.Revenue for the year to March rose by 8.9% to £952.9m, operating profit rose by 7% to £259m, while profits before tax were £159.1m, up from £149.6m. Brokers had been looking at profits of about £155m.South West Water's operating profit rose by 3.6% to £191.6m, while Viridor's contribution was up 12.7% to £65.5m.The final dividend goes up by 5.1% to 14.25p for a full year total of 21p, up 6%. Pennon reiterated its dividend policy of 3% per annum real increases to 2009/10."South West Water is on target to deliver the current regulatory contract to 2010 and has submitted its Final Business Plan for the next regulatory period, 2010 - 2015. Viridor continues to deliver a strong performance based on both organic growth and sound acquisitions," chairman Ken Harvey said.There has been a stream of announcements from water companies in the last few days and Tuesday sees Pennon add to the torrent.Market consensus on pre-tax profit is £155m on revenue of £964m. The full-year dividend is expected to be raised to 20.42p from 19.81p the year before.An update on bad debts could be provided, though this is likely to be less of a problem for Pennon than many of its peers as it has a lower dependence on revenue from industrial customers.